Lucifer's Banker by Bradley Birkenfeld: Summary & Notes

Rating: 8/10

Available at: Amazon

Related: Conspiracy


A story about corruption, Swiss banking, living life to the fullest, and the moral quandaries of blowing the whistle.

The author, Brad Birkenfeld, ended up receiving the highest whistleblower award to date from the IRS for his role in exposing illegal offshore accounts solicited by UBS, one of the largest Swiss banks.

A highly entertaining read, and a cautionary tale about what happens when you work with government.


  • Be friendly but unpredictable, and no one will mess with you.
  • Work philosophy: “Never wait. Do it now.”
  • Build and leverage your relationships: a good word put in via the side door will go a long way.
  • The best time to pitch someone is when they’re having the time of their life. That’s why wining and dining is such a successful strategy.
  • Always negotiate, and always own something. That’s how you get rich.
  • Always have an exit strategy. Meticulous documentation and organization will help you here.
  • Who you know and the money you have matters.

Favourite Quotes

Prologue - Fall Guy

I’d learned something important a long time ago, long before I got into business and banking. And I’d learned it on the ice, playing high school hockey in Massachusetts. Let folks know who you are right away: a guy who seems friendly, but totally unpredictable. Look down at them and give them that leopard smile that doesn’t touch your eyes, and they’ll know not to fuck with you.



My work ethic was “Never wait. Do it now,” and that’s how I’d made friends with Joe Gelsomino, who worked at Credit Suisse First Boston as head currency trader in New York. I’d given tons of trades to Joe and naturally liked him, so right after my interview I called him up.

“Brad! What’s up, buddy?”

“Hey, Joe. I need a small favor. I’m interviewing at Credit Suisse in Geneva, Switzerland, and wondering if you could put in a good word for me.”

I had several memberships at the best British gentlemen’s clubs—East India, Royal Automobile—where I’d entertain them; stuff them with great food, scotch, and cigars; then whisk them off to their favorite passions: fashion shows, rugby scrums, cricket matches, football finals, horse races at Ascot. When a guy’s favorite horse is two lengths ahead on the back stretch and he’s on his feet screaming, that’s the perfect time to pitch him hedge funds because he’ll agree to just about anything.

He did try, and UBS balked, but they kept nagging Harry to snag me on the cheap. In the meantime, I did my research, calling around and discreetly asking my contacts why UBS wanted me so badly. Harry met me again for lunch.

“Listen, Brad, they’ll give you $250,000, a car lease, and a generous bonus. But this twenty percent? It’s not on.”

“Really?” I said. “That’s interesting, because the reason they need me is that the guy who was doing my job got caught watching porn at his desk, so they had to can his ass. I happen to know that you also approached Fred Ruiz over at Credit Suisse, and he declined, so UBS is fresh out of options. Plus, they know I’ve got an MBA, hundreds of clients, and I’ve made money hand over fist for Barclays. Plus, I have a ‘C’ work permit. So it’s twenty percent off the top, or nothing.”

On July 4, 2001, I walked into UBS, and as Christian Bovay and the head of Human Resources added their John Hancocks, I signed my new contract with UBS, including my eighteen percent performance-based bonus (Exhibit 6). Before the ink was dry, I mentioned to Bovay that I’d shortly be bringing him my first UBS client, along with $200 million in assets. Bovay’s burglar-tool teeth gaped wide open.


I was instantly the highest-paid UBS private banker in all of Switzerland.


You’ve already guessed at what happened next. It happened after every one of my field trips.A middle-aged American male, always wealthy, usually bored, shows up at Geneva airport, and from there he’s on Mr. Birkenfeld’s Magic Carpet Ride. There’s a black Mercedes sedan with blacked-out windows waiting, which whisks him off to the Hotel Richemond, where there are fresh flowers and tropical fruit in his fabulous suite overlooking Lac Léman, along with a box of Frigor Swiss chocolates. I pick him up at seven p.m., expressing how sorry I am that his wife couldn’t make it, and suggest he should buy her a nice present. First we have dinner at Le Comptoir, a five-star classy joint with amazing French cuisine. By nine he’s had a few drinks, so I suggest just checking out the sexy girls at Velvet. It’s a very upscale cabaret, which happens to have a “dance” stage off in one corner. There we’re joined by my buddy from London, Ladjel Jafarli, an Algerian-born investment banker who looks like a young Omar Sharif and has a wicked sense of humor.

I also know lots of the girls at Velvet. All of them are “working girls,” Russians, Czechs, Poles, a convenience I’ve taken advantage of on occasion—strictly business. Some of them are just “girls who wanna have fun,” and they’re all gorgeous. By midnight, there’s this tall, blonde, friendly Czech chick standing behind Mr. Client’s chair, massaging his shoulders and whispering God-knows-what in his ear. I wink at her. She winks back. That means I’ll take care of her later. Ladjel yawns and says, “Bradley, your lifestyle is going to kill me, and so would my mother if she knew where I was!” I laugh and say, “I’ve got to get a move-on too, buddy.” Both of us get up and I throw a thousand Swiss francs on the table. “Martina, darling,” I say to the girl. “Will you please make sure Mr. Client gets back to la Paix all right?”

Just to be clear about that eighteen percent, it didn’t mean I’d be getting that size a chunk off the top of any Net New Money I brought in. If that were the case, with Olenicoff’s nut alone I’d have cleaned the table of $36 million and retired to buy myself a hockey team somewhere. What it did mean was that I’d be getting eighteen percent of any revenue made with that big figure. So, for example, UBS was charging Olenicoff three percent to manage his $200 million, which is $6 million, and I was getting $1,080,000 out of that. Whenever Olenicoff invested any of his nut and made a profit, which of course I encouraged, I got my cut for that too. On top of that, the combined portfolios of all my other clients amounted to another $200 million, so bottom line I was making eighteen percent on the fees, securities sales, loan interest, currency transactions, and profits on $400,000,000. My book was about double the size of most other bankers on the desk. In banking, as with other things, size does matter. And since you can’t take it with you, I made sure to enjoy it.



And my clients comprised only a small percentage of American tax-evaders stashing their nuts in the UBS nest of secret numbered accounts. All in all, I had about 150 clients in Birkenfeld’s Big Black Book, thirty of whom were North Americans. But across all the bank’s branches in Zurich, Lugano, Geneva, and elsewhere, UBS had—hold on to your wallets—19,000 American clients enjoying offshore secret numbered accounts. We’re talking billions with a “B” here, folks. That’s a lot of tax revenue not going for beans and bullets.

But there was method to my madness. Even though I had this hunger for fun, I never took my eye off the ball. I nurtured my big black Rolodex phone book, in which I recorded nothing more than people’s names, where I’d met them, and their modes of contact. I took no notes because that’s all I needed to remember who they were and what they did for a living. Then on my computer I created a master spreadsheet, and every year at Christmas I’d write a holiday letter, print it on high-grade paper, include a photo of myself on a white-sand beach in Asia, or in front of the Pyramids in Cairo, or on a majestic sailing yacht in Cannes, and send out two hundred via snail mail. And then I had another spreadsheet with all the annual high-end events taking place around the world—yacht regattas, tennis tournaments, film festivals, wine tastings, auto shows, and car races—and breakdowns of every country’s best restaurants, bars, and hotels (Exhibit 9).


I’d already decided that I was done with private banking forever. It had all been a fun, wild ride, but how many times can you woo some client into investing in stocks, bonds, currencies, or gold bullion before you eventually lose your enthusiasm? I was ready to progress into private equity, using all the contacts I’d made over the years to put big moneymakers together for partnerships and then take my cut of whatever that new endeavor might be. I knew plenty of people with great ideas for start-ups, such as new energy or biotech firms, or proposals for constructing resort hotels in prominent locations. I also knew plenty of others looking for such investments. I’d put them together, and get my cut for the matchmaking plus stock options in the new entities. Do that just a few times successfully and you’re set for life. I knew I’d be successful, and I’d no longer be reporting to corporate ingrates.


Every major corporation in the Western world has a set of internal whistle-blowing policies. Now, you might think those are designed so that any employee who discovers something amiss can complain to his or her superiors and remain confidential, still hold on to his job, and make sure the company stays on the straight and narrow, right? Well, the reality is that usually when an employee finds himself between a rock and a hard place, with no choice but to whistle-blow, everyone nods their heads and says, “Thank you sooo much.” But after that the guy’s a pariah; might as well have a “T” for Traitor tattooed on his forehead. Folks who whistle-blow internally know their careers within that firm are essentially fucked, which is why such action is as rare as virgins in Paris. Most whistle-blowers never get any kind of reward. They’re treated like snitches: They’re intimidated, threatened, retaliated against, and blackballed. They lose their jobs, lose their finances, their families are devastated and their lives destroyed. Almost nobody does it unless their backs are against the wall.



I wasn’t going to sit in my beautiful flat in Geneva and brood. Life goes on, and there were deals to make, parties to attend, and maybe a few women to woo. I threw myself back into some private equity deals with my close friend Dave, a guy with an eye for great start-ups and matching investors. I winged over to Mumbai and met with the Indian Minister of Oil and Gas, where we signed a deal for the purchase of American coal, the “clean” type.

Then I flew over to Beijing and Shanghai, meeting with senior Chinese officials and pitching my coal deal, as well as some prime real estate opportunities in Europe.


I’ve never like Florida all that much.

Not that I have anything against Disney World or Mickey Mouse, and Daytona’s a fine motor speedway, even though it’s not Formula One. Miami can be fun if you like the beaches, bikinis, and Latin nightlife, which I generally do, but it’s not Saint-Tropez or Cancún. So, other than some light entertainment, I’ve always thought of the state as sort of flat, barren, and humid, a place to escape from New England winters when your bones are aching and you’re craving a lounge chair and drinks with pastel umbrellas. If you’re still relatively young, a visit to Florida can be like a bleak peek at your future: lots of sweet old folks with blue hair, moving slowly. God’s waiting room.


None of us American taxpayers had a hint of what was going on at the time. Ms. Clinton’s under-the-table deals with the Swiss wouldn’t come out until another whistle-blower, Bradley Manning, dumped thousands of classified US government emails and cables all over the Internet. Included among those were just a few State Department after-action reports about Clinton’s quid pro quo with UBS and the Swiss.

One of the biggest benefactors of Paulson, Bernanke, and Geithner’s $700 billion shell game was AIG, the mega insurance firm designated “too big to fail.” One hundred eighty billion dollars was funneled to AIG, and AIG turned around and slipped $100 billion of that to twenty of its foreign bank business partners.

Want to guess who got a huge chunk of your hard-earned and squeezed-from-your-savings-account taxpayer money? That’s right: UBS. AIG slipped UBS a cool $5 billion from the bailout received. And nobody knew about it. It didn’t come out until Geithner was forced to divulge exactly how he’d spent the people’s money. But that’s why UBS wasn’t too worried about having to write a check for $780 million to the IRS. In public, they cried and whined and had tantrums about it. In private, they were laughing their asses off. Another “deal of the century,” and the American taxpayer gets screwed (again).

On April 30, 2009, in a district court in Florida, UBS finally responded to the “John Doe” summons and turned over the names of 4,500 American secret account holders. That’s 4,500 out of 19,000 American account holders; you do the math. The list was cherry-picked; no one of any significance was on it. They were all trust-fund babies, doctors, small-business owners, and self-made millionaires. No politicians, power players, campaign fund-raisers, defense contractors, or lobbyists.


It looked exactly like those refund checks you get sometime after April 15, if you’re lucky. It was made out to Bradley Birkenfeld, in the total amount of $75,816,958.40! My total reward was for $104 million, but the government had taken out taxes. Did I care at that point? Hell no. What’s a few dozen million between friends, right?


Another man might have gone wild, throwing exorbitant parties, bathing in champagne, seducing beautiful women with baubles and promises he was unlikely to keep. But I’d already done all that, and I’d learned long ago that it wasn’t about the money at all. I had lived in that world for nearly two decades and discovered that even the most wealthy and powerful people weren’t made whole by their riches or influence. I had seen firsthand that the coveted trappings of wealth were often merely bandages for wounded hearts.

Life was about the joy of living, the people with whom you lived it, and if you were suddenly a man of means, it was about helping those you loved who deserved it. In a way, I was like a man who had won a lottery. But instead of just picking lucky numbers, I had fought the fight of my life for this prize, and the scars of that battle would always remain.

One choice fomented in my mind soon after my release and solidified later with clarity—and some sadness. Once my probation ended, I was going to leave the United States, probably never to return. It was the country of my birth, where I had gone from being a patriot willing to die for it to becoming an oppressed citizen, burned and betrayed. To me, America was no longer that shining city on the hill. It was ruled by corrupt politicians, incompetent prosecutors, and greedy financiers, many of whom were my sworn enemies, and would be so to this day and beyond. I knew I’d always be looking over my shoulder, but far from America’s shores would be better. I thought about a nice lake in Europe, with a secluded parcel of slope on the shore, a large, strong house, and well-armed bodyguards. I would still visit my friends and family in the States, of course, and they would happily visit my castle as well. But I would never again be subject to the whims of the unjustly powerful. I had lived well before, and I knew how to enjoy it.

But that wouldn’t happen for another few years.

Author Q&A

Q. Speaking of the military, is what you did patriotic? What about the years before you turned in those bankers—when you were signing up more and more rich people to Swiss numbered accounts? Was that patriotic?

A. This is a tough question. I don’t believe patriotism has any bearing on what I may or may not have done. Opening up accounts for US and other foreign clients in Swiss bank accounts was my job, as it had been for hundreds of other private bankers across Switzerland for decades. I performed my job with the understanding that the firm was not asking us to violate laws in their name.

The question of whether clients shirking their tax obligations are being unpatriotic is also a curious one. There are many cash-based service industries in the United States and elsewhere where large proportions of revenues are not declared to tax authorities. Are all of these “non-declarers” unpatriotic? Are the clients of these providers unpatriotic for not “outing” their providers for not fully disclosing their income, or worse, complicit for not reporting cash payments to tax authorities? Or do these people have moral standing for refusing to pay taxes to a government with lax spending controls and discipline? These are complicated, value-loaded questions.

My feelings on the subject have evolved over time. As I explain in the book, it was easy to turn a blind eye to questionable activities when you believed these were sanctioned and vetted by your firm. Unquestionably, it was also easy to turn a blind eye when you were young, invincible, and the money was rolling in. As the years wore on, however, you recognized that what may or may not be legal was not always ethical. Was it right for our clients to shirk their tax obligations, and thus leave the less sophisticated and less wealthy to shoulder a heavier share of the tax burden? You might ask why I didn’t act on these ethical instincts earlier. Good question, but the same applies to most of us. Many of us have been exposed to similar ethical quandaries. These are tough situations to face, let alone fix.

In the end, the problem was solved for me when I confirmed through the “Three-Page Memo” that many of my job responsibilities had crossed the line. At that point I realized the game was over. I could have just walked away, but instead I had the courage to take on the most powerful bank in the world as I brought their illegal and unethical activities to light.

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